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2024-06-10 • Updated

Discover how to gain real profits from Forex gold trading

Gold has been magically attractive metal for ages as it is a symbol of wealth and status all over the world. Although the times of golden rush has gone long ago it still makes one’s eyes burn. Since the days of the Inca gold fascinates people and causes an irresistible desire to own it. Let’s face it. Unlike cash or oil, gold is romantic. And owning gold is more than just a little bit impressive. I’m absolutely sure that you have been wondering, "How can I get it?" from time to time.

Quite easy! Gold can be traded in many ways. One way is to physically own and directly invest in gold coins and bullions. You can also invest in gold mining companies by buying their shares. There are a number of young gold and silver mining companies that can be real good investments. 

Another way is to trade gold at Forex market. Gold might the best investment opportunities that you shouldn’t miss.  Forex  gold trading is very close to trading currency pairs. At the same time, of course, such type has a number of specific features. In turn, if you are also planning gold trading on the Forex market, which is appealing to many traders, you will be able to diversify your arsenal of working tools. They include quite high spreads and low leverage set by the gold trading brokers. Moreover, by analyzing Forex gold trading and changes in the XAU/USD pair on the charts, you will be able to find a number of important market trends. They will help you better understand how to trade on the currency market.

An advantage of investing in gold is that it protects a diversified portfolio from experiencing big losses in a volatile economic climate. Investors with a portfolio of diversified assets may experience a decline of certain stocks and bonds and an increase in the price of gold in a struggling economy. A disadvantage of investing in gold is that gold prices are affected by speculators involved in day trading, which can make gold prices volatile.

Gold is a leading economic indicator, and the changes in gold prices can explain investor sense of the state of the U.S. and world economies. An increase in gold prices typically signals that the U.S. economy is struggling. Factors that contribute to an increase in the price of gold include a weak dollar, an increase in inflation and low interest rates over the long term. Individuals interested in investing in gold should understand the relationship between the price of gold and the  Forex  market. 

Probably the best example of a spike in a price for gold were recent U.S. President elections and Brexit vote in the UK which pushed the gold price to reach in the biggest gain for 21 months, rising 3.1%. The elections of U.S. present were a time of great volatility in the markets, so trading at this time was only meant for those with the psychology built for scalping. Traders had to be prepared to spend a lot of hours in front of their computers looking at real-time Forex charts and keeping an eye on the news.

Listen to advice, trading gold on Forex you’d better wait for candle close before jumping in or out. Be especially accurate when entering a trade. If you watch the final minutes of a candle, whether it’s a 30-minute candle, an hourly candle or a four-hour candle, gold can take a quick turn and reverse direction. Don’t speculate as to what you expect gold will do through a certain point of time, because you could be very unpleasantly surprised.

As with any trading instrument, there is no single “best” way to trade gold. Many traders from other markets have found that the technical trading strategies they employ on other instruments can easily be adapted to the gold market, especially given gold’s tendency to form durable trends.

For short-term traders, a classic way to try to profit from the frequent trends in gold is to use a moving average crossover strategy. In this strategy, a trader would look to buy gold if a shorter-term moving average crossed above a longer-term moving average and sell when the shorter-term moving average crosses below the longer-term average. While longer-term position traders and investors can focus more on the fundamentals that drive gold’s price, such as the level of real interest rates. 

However and whenever you are ready to trade gold, you should be quite careful. Develop a healthy respect for the fact that gold is volatile and can swing wildly in either direction. Pay attention to what’s going on in the world, because it can quickly affect the gold prices. It can be tied to a fluctuating currency or used in electronics because of its anti-corrosive and conductivity properties. Or it can be used in making jewelry or held for safe-keeping by royalty and dynasties. Unlike commodities, it’s hard to predict what will set it off, so prepare your plan and be ready to act quickly.  At the same time, don’t forget that gold is considered by experts as part of the current year's best performing investment product.

Trade with gold!

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